[FONT=arial, helvetica]Transportation[/FONT]
[FONT=arial, helvetica]Obstacles Await US Airways
[/FONT][FONT=arial, helvetica]By Ted Reed
TheStreet.com Staff Reporter[/FONT]
[FONT=arial, helvetica]11/17/2006 12:07 PM EST[/FONT]
[FONT=arial, helvetica]URL: http://www.thestreet.com/newsanalysis/transportation/10322860.html
Among the many complications US Airways (LCC) suddenly faces after launching an $8 billion bid for Delta (DALRQ) is an increased focus on its uneasy labor relations.
That became clear Thursday in Charlotte, where about 400 uniformed pilots stood quietly, side by side, for two hours, demonstrating their frustration with the slow pace of labor talks that began last year.
Duane Woerth, national president of the Air Line Pilots Association and a union official for 25 years, said the turnout was the largest he has ever seen by non-striking pilots. Another 300 pilots staged a similar demonstration in Phoenix, the union said.
"If [US Airways CEO Doug] Parker can raise $8 billion, God bless America," Woerth said. "That means there's money for the pilots."
Even before the takeover bid was announced Wednesday, ALPA viewed US Airways as the place to begin to reclaim the ground it lost during five years of industry cost-cutting, as four legacy carriers negotiated contracts in bankruptcy court.
"US Airways was first in, and first out," Woerth said. "Their contract is everybody's contract. So we're bringing it on for this one. We have to get this one right."
While ALPA already provides staffing and legal support during local negotiations, the US Airways pilots -- including former America West pilots, who currently have a separate contract -- will get more visible support from the national union, Woerth said.
Although most of the 400 demonstrators were from US Airways, a smattering represented other airlines.
One was Mike Donatelli, chairman of Delta's strike committee. "I'm here to show that we're a national union and we have one voice," he said. Delta pilots, who are represented on the airline's creditors committee, havn't yet taken a position on the takeover bid, Donatelli said.
The US Airways pilots have. Jack Stephan, chairman of the US Airways ALPA chapter, said pilots don't think the airline is ready for another merger because it hasn't yet negotiated contracts following the September 2005 deal that brought together the former US Airways and America West.
"If this airline can't successfully put two together, we are very skeptical about their chances of putting three together," he said.
Over the past five years, US Airways pilots have made $7.8 billion in concessions that include lost jobs, salaries and benefits, putting them among the lowest-paid pilots in the industry, the union said. With the airline ready to spend on a merger, pilots want to be dealt in.
While the contract covering pilots at the former US Airways doesn't open for amendments until the end of 2009, the agreement covering pilots at the former America West could be reworked in June. The airline could benefit from unifying the two pilot groups, and it's seeking a single contract. But Parker has said he is willing to continue with two if a deal can't be reached.
On a conference call Wednesday, Parker said that in a merger with Delta, US Airways would cut costs by finding synergies in many areas. However, it "would take labor costs to the highest common denominator in all groups," creating "a negative synergy" of $90 million, he said.
In an interview, President Scott Kirby said the number is based on the assumption that all of the unions on the property at US Airways would also represent workers at Delta, which has traditionally been nonunion except for its pilots.
Mike Flores, president of the US Airways chapter of the Association of Flight Attendants, said that $90 million "sounds extremely low." In current negotiations, he said, US Airways has been "fighting over every nickel and dime." But the chance to extend union representation to Delta's 11,000 flight attendants would benefit workers, he said.
"AFA has tried to represent the flight attendants at Delta for a number of years, and has faced a hard battle." US Airways has about 8,000 flight attendants.
Delta also has about 6,500 fleet service workers, and a similar number of mechanics, who would likely get a chance to join the International Association of Machinists if a merger occurs. Extending union protection "would be a good thing," said Robert Roach, the IAM's general vice president.
First, the union would want to be sure a merger doesn't result in job losses for members or "people who are going to be members," Roach said.
Additionally, he said, "US Airways has to demonstrate the ability to merge the two existing airlines before they go out and get a third airline into the process. Otherwise, it would create chaos." [/FONT]
[FONT=arial, helvetica]Obstacles Await US Airways
[/FONT][FONT=arial, helvetica]By Ted Reed
TheStreet.com Staff Reporter[/FONT]
[FONT=arial, helvetica]11/17/2006 12:07 PM EST[/FONT]
[FONT=arial, helvetica]URL: http://www.thestreet.com/newsanalysis/transportation/10322860.html
Among the many complications US Airways (LCC) suddenly faces after launching an $8 billion bid for Delta (DALRQ) is an increased focus on its uneasy labor relations.
That became clear Thursday in Charlotte, where about 400 uniformed pilots stood quietly, side by side, for two hours, demonstrating their frustration with the slow pace of labor talks that began last year.
Duane Woerth, national president of the Air Line Pilots Association and a union official for 25 years, said the turnout was the largest he has ever seen by non-striking pilots. Another 300 pilots staged a similar demonstration in Phoenix, the union said.
"If [US Airways CEO Doug] Parker can raise $8 billion, God bless America," Woerth said. "That means there's money for the pilots."
Even before the takeover bid was announced Wednesday, ALPA viewed US Airways as the place to begin to reclaim the ground it lost during five years of industry cost-cutting, as four legacy carriers negotiated contracts in bankruptcy court.
"US Airways was first in, and first out," Woerth said. "Their contract is everybody's contract. So we're bringing it on for this one. We have to get this one right."
While ALPA already provides staffing and legal support during local negotiations, the US Airways pilots -- including former America West pilots, who currently have a separate contract -- will get more visible support from the national union, Woerth said.
Although most of the 400 demonstrators were from US Airways, a smattering represented other airlines.
One was Mike Donatelli, chairman of Delta's strike committee. "I'm here to show that we're a national union and we have one voice," he said. Delta pilots, who are represented on the airline's creditors committee, havn't yet taken a position on the takeover bid, Donatelli said.
The US Airways pilots have. Jack Stephan, chairman of the US Airways ALPA chapter, said pilots don't think the airline is ready for another merger because it hasn't yet negotiated contracts following the September 2005 deal that brought together the former US Airways and America West.
"If this airline can't successfully put two together, we are very skeptical about their chances of putting three together," he said.
Over the past five years, US Airways pilots have made $7.8 billion in concessions that include lost jobs, salaries and benefits, putting them among the lowest-paid pilots in the industry, the union said. With the airline ready to spend on a merger, pilots want to be dealt in.
While the contract covering pilots at the former US Airways doesn't open for amendments until the end of 2009, the agreement covering pilots at the former America West could be reworked in June. The airline could benefit from unifying the two pilot groups, and it's seeking a single contract. But Parker has said he is willing to continue with two if a deal can't be reached.
On a conference call Wednesday, Parker said that in a merger with Delta, US Airways would cut costs by finding synergies in many areas. However, it "would take labor costs to the highest common denominator in all groups," creating "a negative synergy" of $90 million, he said.
In an interview, President Scott Kirby said the number is based on the assumption that all of the unions on the property at US Airways would also represent workers at Delta, which has traditionally been nonunion except for its pilots.
Mike Flores, president of the US Airways chapter of the Association of Flight Attendants, said that $90 million "sounds extremely low." In current negotiations, he said, US Airways has been "fighting over every nickel and dime." But the chance to extend union representation to Delta's 11,000 flight attendants would benefit workers, he said.
"AFA has tried to represent the flight attendants at Delta for a number of years, and has faced a hard battle." US Airways has about 8,000 flight attendants.
Delta also has about 6,500 fleet service workers, and a similar number of mechanics, who would likely get a chance to join the International Association of Machinists if a merger occurs. Extending union protection "would be a good thing," said Robert Roach, the IAM's general vice president.
First, the union would want to be sure a merger doesn't result in job losses for members or "people who are going to be members," Roach said.
Additionally, he said, "US Airways has to demonstrate the ability to merge the two existing airlines before they go out and get a third airline into the process. Otherwise, it would create chaos." [/FONT]
